Following widespread criticism, commercial banks to lower interest rates

KATHMANDU: The interest rate for both deposits and loans will decrease in the coming March.

The Nepal Bankers Association (NBA), the umbrella organization of commercial bank CEOs, decided to lower interest rates in March.

Associations representing industrialists and the private sector have demanded that banks and financial institutions immediately reduce their interest rates.

Following increasing pressure from all sides, the union has decided to only lower the interest rate by a normal number.

Sunil KC, president of the association, stated that the premium rate on deposits will be reduced by 0.4 percent and the premium rate on loans will be reduced by 1% beginning March 15. He also stated that they are working on gradually lowering loan interest rates.

Banks currently charge a premium of up to 6% over the base rate. After a 1% reduction, the premium rate will be set at 5% on the base rate.

Similarly, they will pay a minimum of 6% to a maximum of 8% interest on ordinary savings towards deposits.

Previously, the interest rate on ordinary savings was set to range from 6.42 percent to 8.42 percent.

Fixed deposit interest rates have remained constant. Banks are currently paying 11 percent interest on fixed deposits.

Similarly, the institutional interest rate is set at 9%, and the remittance term account interest rate is set at 12%.